CPUC says no to county law on desal plant ... again

There will be no rehearing on Monterey County's ordinance requiring public ownership of desalination plants before the state Public Utilities Commission, leaving the county with a decision to make.

On Thursday, the PUC formally denied a request for reconsideration by the county and the Marina Coast Water District of the commission's decision finding its own authority preempts the county law, as well as the jurisdiction of local courts to rule on the issue. In rejecting the request, the commission did amend its earlier decision by declaring that it only applied the preemption of the county's regulatory oversight of "public utility facilities or operations."

The PUC's decision was aimed at clarifying its authority to approve a desal plant for a private firm, California American Water, as part of the $400 million Monterey Peninsula Water Supply Project, which is designed to provide a new water supply to offset a state-ordered cutback in pumping from the Carmel River.

While the county has previously agreed not to enforce its ordinance against Cal Am as part of a deal to regain millions spent on the failed regional desal project, County Counsel Charles McKee said he remained concerned that the CPUC's decision was "overbroad" and could apply to other desal proposals. McKee said the county has acknowledged enforcing the ordinance against Cal Am would be a challenge. He added, however, that it remains in the county's interest to maintain a level of oversight on desal proposals, particularly with regard to the technical and financial capacity of those proposing them, under its jurisdiction.

McKee said that leaves county officials to decide whether to pursue a hearing before the state Supreme Court on the PUC's preemption decision. Since the county has 30 days to seek such a hearing, and the Board of Supervisors is due to take its summer break after Tuesday's meeting, McKee said he may have to bring the matter to the supervisors in an emergency session.

Cal Am spokesman Kevin Tilden said company officials always believed the county could not enforce its ordinance against a "public utility" providing water under a "service order," but suggested the county could still retain oversight of a "merchant plant" seeking to earn a profit from the sale of desal water.

The proposed settlement agreement between the county and Cal Am is pending before the PUC, which is also considering Cal Am's request to keep millions of dollars in county invoices for work on the regional project confidential. Cal Am is seeking permission to repay the county up to $3.5 million spent on the project, and charge its Peninsula customers for most of that.